The Certificate of Loss in Switzerland: Consequences and Duration

The Certificate of Loss in Swiss Law

The certificate of loss (acte de defaut de biens) is an official document issued by the debt collection office when a creditor has not been fully satisfied at the end of a debt collection or bankruptcy procedure. It serves as both an acknowledgement of debt and a finding of partial insolvency.

Issuance of the Certificate of Loss (Art. 149 DCBA)

Under art. 149 para. 1 DCBA, the debt collection office issues a certificate of loss to the creditor participating in the attachment when the realisation of the attached assets did not cover the full amount of the claim. The certificate states the amount of the claim, the sums recovered and the outstanding balance.

The certificate of loss constitutes an acknowledgement of debt within the meaning of art. 82 DCBA. This means the creditor can, on the basis of this certificate, initiate new proceedings and directly obtain provisional removal of objection, without having to prove the existence of the debt again.

Certificate of Loss After Bankruptcy (Art. 265 para. 2 DCBA)

In bankruptcy proceedings, creditors who have not been fully satisfied also receive a certificate of loss (art. 265 para. 2 DCBA). This grants them the same rights as a certificate issued in attachment proceedings. The bankrupt remains liable for the balance of the debt even after the closure of bankruptcy.

Validity Period and Cancellation (Art. 149a DCBA)

Art. 149a DCBA governs the expiry of the certificate of loss:

1. The claim evidenced by the certificate of loss is time-barred after 20 years from the date of issuance
2. This period can be neither suspended nor interrupted
3. Upon expiry of this period, the certificate of loss is cancelled ex officio

This 20-year period is absolute. Unlike the ordinary limitation period for claims, it cannot be interrupted by new proceedings. This rule is designed to allow the debtor to eventually return to a normal financial situation.

Practical Consequences for the Debtor

The existence of a certificate of loss entails significant practical consequences:

Housing: property management companies systematically check the debt collection register. A certificate of loss makes it very difficult to enter into a lease, as it signals a risk of insolvency. Some agencies automatically reject applicants with a certificate of loss.

Employment: in certain sectors (banking, fiduciary, insurance, public service), an extract from the debt collection register is required upon hiring. A certificate of loss may constitute grounds for rejection, particularly for positions involving the management of funds.

Credit: obtaining a bank loan or leasing is practically impossible with a certificate of loss. Financial institutions systematically verify and consider the certificate as a major risk indicator.

New attachment: the creditor may initiate new proceedings at any time during the 20 years. However, they can only attach assets that the debtor has acquired since the issuance of the certificate (art. 149a para. 1 DCBA). Assets already realised during the first proceedings cannot be attached again.

The Debtor's Right to Payment

The debtor may at any time pay the amount stated on the certificate of loss and request its cancellation. Full payment of the claim, including interest, results in the removal of the certificate from the debt collection register. This is the only way to obtain early cancellation.

Alternatives for the Debtor

Several options can help manage the situation:

1. Negotiate a payment arrangement with the creditor
2. Seek assistance from a debt counselling service (Caritas, CSP)
3. Consider an amicable debt settlement procedure
4. Wait for the 20-year period to expire if the amount is unpayable